Boston Proudly Invests in its Schools

With Mayor Walsh announcing today that the City will again expand on its commitment to public education, we thought it would be a good idea to provide some context for those of you interested in the budget of the Boston Public Schools. Boston has unique structural funding challenges, but we still find ways to invest heavily in Education.

Boston Proudly Invests in its Schools

Boston has invested more robustly in Education than its peer cities (https://www.census.gov/newsroom/press-releases/2015/cb15-98.html). Much of this investment is purposeful and results-driven, but some is the result of inefficiency. For example, we believe investing in quality teachers leads to better student outcomes. And in fact, BPS spends 54% more on its teachers than other districts do. Our student to teacher ratios are 17% lower than our peers, and Boston pays our teachers 29% more. We have also instituted a policy of mutual consent hiring, which gives school leaders more autonomy to hire quality, diverse teachers. However, it has also left the district with a very expensive excess teacher pool.

This chart shows how much more Boston spends than peer districts in major areas.

Source: Education Resource Strategies

Boston also spends heavily on school transportation, at over $100 million, or 10% of the BPS budget. Although Superintendent Chang is actively working to squeeze every possible efficiency out of the BPS Transportation Department, transportation costs will remain high in the near future due to a number of benefits BPS provides to its families. For example, to prevent disruption to families when BPS moved to the Home Base school assignment system, BPS allows students and their siblings to stay in their old schools, regardless of the distance from their home. This is a great benefit to families, but these exceptions increase the geographic distribution of a school’s students, lead to vacant buses, and create inefficiencies that limit the district’s ability to manage transportation costs.

Teacher compensation and transportation are just two examples of areas where Boston invests more heavily than comparison districts. Others include Special Education and English Language Learning. For example, next year BPS is increasing resources for its English Language Learning population, and expanding ELL academic programs, Sheltered English Immersion programs and teacher training.

We are making strong investments that we should be very proud of as a community.

Some examples of where BPS plans to add or reinvest include:

· $3 million to add 200 new prekindergarten seats, for a total increase of 400 budgeted seats since the Mayor took office;

· $1.2 million for Excellence for All to bring a rigorous 4th grade experience to a diverse set of students;

· $650,000 to open 33 new classrooms at 18 new schools;

· $1 million for a data system to improve parent access to children’s special education plans;

· $1 million for additional support teams for inclusion classrooms;

· $1 million for transition services for special education student age 14–22;

· $1 million for planning to extend the school day for over 15,000 additional students in the near future; and

· $600,000 for a new transportation data system that will help BPS to track ridership, provide information to parents, and improve student safety.

Yet, some schools continue to struggle to balance their budgets, while others are forced to make difficult tradeoffs. In many cases, this is the result of enrollment changes within schools. The district’s well-regarded school funding system leaves staffing decisions to schools. Funding is allocated based on the composition of students enrolled in schools, and when schools experience declines in student needs or overall population, the accompanying budget adjustments can be challenging. In other cases, the district has chosen to reallocate resources to maximize the impact of its dollars.

Investment in Education Far Outpaces All Other Spending

As the state’s capital City, we provide funding to nearly 50 departments with diverse and vital missions, ranging from homelessness and addiction services, police, fire, and EMS, America’s oldest public parks system, and special offices for Women’s Advancement, Immigrant Advancement, and Youth Engagement and Employment. We have tremendous needs in our City, and our FY17 budget recommendation strives to meet them. As important as all of these investments are, they pale in comparison to our commitment to education.

Looking back over the past five years, investment in BPS has increased much faster than other City departments, growing by 25%, while public safety departments grew by 20%, and all other departments grew by less than 13%. Because Boston has been committed to investing in BPS even as the City’s Charter School costs have climbed sharply, Boston’s total education budget grew by almost 33% over that same time. Maintaining this level of commitment to BPS, with fixed costs rising as well, has not been easy. The City has had to reduce positions in other departments.

Boston is Uniquely Hamstrung by its Revenue Options

Of course the other lever available to increase the BPS budget is to increase revenue. Most of BPS’s operating budget comes from the City’s General Fund, which is heavily reliant on a single source of revenue- the property tax. The City’s success in producing new property tax revenue through its encouragement of development has been critical to its ability to support the current level of investment in BPS.

It’s important to remember that much of that growth is already eaten up by past commitments such as health insurance, contractual raises, pension and debt costs, and state assessments for charter schools and public transportation. Still BPS is receiving by far the largest increase of any department.

Due to dwindling state and federal education funding, Boston is far more dependent on local sources for education funding than peer districts nationwide (according to the National Center for Education Statistics). Even locally, many municipalities in Massachusetts count on the state for a majority of their school funding.

Because of its archaic nature, the state’s Chapter 70 school funding formula does not work for Boston. While the state provides an average of 46% of school district foundation budgets statewide, it provides just 27% for Boston.

Even as the state provided an influx of $900 million statewide between 2008 and 2017, aid to Boston, the state’s largest City, has not increased at all. The formula does not adequately recognize the expensive nature of the City’s student population, which speaks over 75 languages at home, and includes more than five times the number of special education students the formula assumes. It also considers Boston “rich” due to its high property values and income, while failing to recognize that these characteristics do not directly contribute to municipal revenue.

This challenge is compounded in Boston by the stark decline in support for statutory charter reimbursement funding, which is one of Boston’s most significant sources of local aid. While the City is required to pay its assessment to charter schools regardless of its budgetary considerations, the state’s reimbursement of “transition funding” is subject to the annual budget process, and has resulted in Boston missing out on $28 million over the past two years. Next year, we’re projected to lose out on an additional $16 million.

Unlike many of its national peers, Boston lacks tools to fully benefit from its economic success. Aside from new construction, our property tax levy only increases by 2.5% per year due to Proposition 2 ½.

Source: National League of Cities

So, when property values increase by 16%, as they did this year, property tax revenue does not follow suit. Additionally, the City does not impose, nor does it have the legal ability to impose, broad based sales or income taxes, unlike many cities outside of Massachusetts.

Source: National League of Cities

Aggressive Tackling of Structural Challenges is Underway

Despite this perfect storm of fiscal inflexibility, Boston has not wavered in its commitment to education. The frustrations expressed this year regarding the BPS budget have reaffirmed the Administration’s view that the structural challenges at BPS can no longer be ignored. This is why the Mayor’s Office and the leadership team of Superintendent Chang at BPS are working diligently on a multi-pronged effort aimed at creating a sustainable, world-class public school system. This includes:

1. The establishment of the Boston Public Schools Long-Term Financial Planning Advisory Committee. Since January, they have been working on a long-term plan for BPS solvency. This work has included delving into cost drivers and researching revenue opportunities. They are doing the hard work of evaluating the tradeoffs that will be necessary to create the school district we want in the future. This fall, this group will share its findings with the School Committee, and its work will guide our course over the next several years.

2. Continued work on school facilities. The BuildBPS Educational and Facilities Master Plan is underway, and will provide a strategic framework for construction and renovation projects in BPS over at least the next ten years. The BPS footprint is a labyrinth of incongruent grade configurations in buildings mostly built prior to World War II. Our schools don’t all have modern amenities necessary to respond to the accelerating rate of innovation, or to meet the demands of 21st century learning. In many cases, they also don’t have the right grade levels and aren’t in the right locations. With the public’s help, we will build a plan for what our school footprint should look like for the next generation.

3. Responsible and transparent financial commitments. From now on, the School Committee will be presented formal fiscal impact analysis for every proposal brought before them. Being transparent about the true long-term costs of proposals before the Committee will help the Committee and the public understand the implications of decisions and will minimize fragmented decision making.

The fiscal picture is complex, but ultimately tells a very clear story. If we remain mired in old ways of doing business, we will continue to live year to year, making adjustments on the periphery to hold on to the school district we have. If we want better for our schools and our children, we will have to do the hard work of serious reform.

Special thanks to Budget Director Katie Hammer and the entire Office of Budget Management team for their assistance in research for this post.